Andrew Alexander of the Daily Mail on Wal-Mart's price war.

Now that Wal-Mart has taken over Asda, we are in for a knock-em-down, drag- 'emout price war on the high street. Well, that's the theory. And none of the big super-markets will say it's untrue, will they? They live by constantly informing customers that they are slashing prices all the time. But whether we will see more than price skirmishes in the end remains questionable.

Asda has gained much publicity by announcing prompt cuts on 600 standard items to save customers about £200m a year.

Tesco ripostes that it has already cut prices this year to the value of £130m and promises that anything Asda does it can do better - or at least as well. Safeway's counterblast is that its recent price initiative will mean 20% off over 1,000 products.

All this sounds very dramatic until one appreciates that the very largest supermarkets may stock as many as 55,000 lines. The announcements so far signal no more than the sort of skirmishing which is normal in the trade. This is not to deride the supermarkets. Competition is continuous and there are no sensational returns on the immense capital expenditure involved.

Would that it were so, shareholders may say. Relative to the stock market average, the sector has under-performed over the last five years. Asda's stock price only outperformed when Wal-Mart stepped in to buy the business. Sainsbury has underperformed and Safeway markedly so.

Tesco and Morrison have outperformed but only by 15% and 25% respectively over the period. Price campaigns will continue as the firms find new ways to raise productivity and squeeze the food manufacturers - there's a rough sector for you - to help them fight for the housewife's money.

They will also continue to widen the range of non-food items and extra services like banking.

The last time there was a really brutal price war was in 1995 when Tesco and Asda went head-to-head on fresh produce.

In the trade they still talk of bananas being sold, as loss leaders, at two thirds below wholesale cost. The potential for mutual damage was quite severe.

Peace of a sort broke out and the sector reverted from price wars to price raids. Since most of these were waged on basic items, the benefits to the public have been substantial.

The role of Wal-Mart will certainly be significant. The American firm has huge buying clout in the US but it sells a limited amount of food and this power may not prove all that effective in supermarkets in Britain. It is unlikely to affect most fresh food. But in non-food items it can make an impact.

There is obviously a problem here for shareholders in the British firms.

Even if the price war is much less dramatic than people have come to expect, there will be an impact on margins. There will be a serious premium on efficiency. Tesco and Morrison look likely to continue to do best and Sainsbury and Safeway to suffer.

Tesco has the added prospect of its adventurous overseas programme. The group will have 30 hypermarkets in central Europe by the end of next year and is feeling its way in the Far East. Memories of the French venture Catteau may linger.

It was abandoned in 1997, though with no loss or gain. But Tesco will have learnt lessons from this.

One unknown hovering over the sector is the current inquiry by the Competition Commission. It is hard to see justification for its concern about the supermarkets, other than the politicians' desire to appear as the shoppers' friends.

But, as Clive Black at Charterhouse Securities points out, it will be hard for the government to say, first, that a searching inquiry is needed and then clear the firms of serious faults. And given the new official guidance on curbing outof-town shopping centres, ministers are actually reducing the scope for price cutting. Housewives please note.